Test Bank of Daniels International Business

International Business, 13e (Global Edition) (Daniels/Radebaugh/Sullivan) Chapter 11 Strategy in International Business 1) Political, legal, economic, monetary, and institutional forces are among the forces that comprise the of international business that sets the context for managers' actions A) environment B) competition C) culture D) threat Answer: A Diff: Page Ref: 438 Skill: Concept Objective: STUDY QUESTION 11.1: What are some of the general features of the challenge and importance of strategy in international business? 2) Which of the following is an external influence on international business managers? A) production plant locations B) host country monetary policy C) supply chain linkages D) product design standards Answer: B Diff: Page Ref: 439 Skill: Application Objective: STUDY QUESTION 11.1: What are some of the general features of the challenge and importance of strategy in international business? AACSB: Reflective Thinking 3) is the framework that managers apply to determine the competitive moves and business approaches that run the company A) Competition B) Growth C) Strategy D) Independence Answer: C Diff: Page Ref: 439 Skill: Concept Objective: STUDY QUESTION 11.1: What are some of the general features of the challenge and importance of strategy in international business? 4) The forces in the MNE's environment that routinely have the greatest impact on its strategy are in its environment A) legal B) cultural C) technological D) immediate industry Answer: D Diff: Page Ref: 439 Skill: Concept Objective: STUDY QUESTION 11.1: What are some of the general features of the challenge and importance of strategy in international business? 5) The industry organization (IO) paradigm reports that, on average, the best predictor of firm strategy is the A) company's stockpile of assets, skills, and capabilities B) aggressiveness of a company's objectives C) consistency among a company's structure, systems, and processes D) structure of the industry in which it competes Answer: D Diff: Page Ref: 440 Skill: Concept Objective: STUDY QUESTION 11.2: What are the competing views of firm performance in terms of the industry organization (IO) versus strategic management perspectives? 6) The Industry Organization (IO) paradigm assumes which of the following? A) stable foreign exchange rates B) shifting foreign exchange rates C) perfect competition D) imperfect competition Answer: C Diff: Page Ref: 440 Skill: Concept Objective: STUDY QUESTION 11.2: What are the competing views of firm performance in terms of the industry organization (IO) versus strategic management perspectives? 7) Which of the following is the most important constraint on the power of the IO paradigm? A) Many companies are locally but not internationally competitive B) Many industries are imperfectly competitive C) Most customers have perfect knowledge of the products they select D) Most industries have many firms that each have small market shares Answer: B Diff: Page Ref: 440 Skill: Concept Objective: STUDY QUESTION 11.2: What are the competing views of firm performance in terms of the industry organization (IO) versus strategic management perspectives? 8) The IO paradigm has been qualified by the potential for to lead to a company's sustained competitive advantage A) bright, motivated managers B) political trends and events C) cultural institutions D) the emergence of new markets Answer: A Diff: Page Ref: 440 Skill: Concept Objective: STUDY QUESTION 11.2: What are the competing views of firm performance in terms of the industry organization (IO) versus strategic management perspectives? 9) Increasing globalization is a powerful force of change for competition in an industry because A) it increases rivalry among companies in the industry B) foreign competitors typically have cheaper, higher quality products C) it makes innovation partners more predictable D) it requires companies to have low costs in order to compete Answer: A Diff: Page Ref: 443 Skill: Application Objective: STUDY QUESTION 11.3: What is industry structure? How can managers interpret it? AACSB: Analytic Skills 10) Which of the following is NOT among the five forces in the Five-Forces Model of Industry Structure? A) governments B) buyers C) potential new entrants D) suppliers of raw materials Answer: A Diff: Page Ref: 442 Skill: Concept Objective: STUDY QUESTION 11.3: What is industry structure? How can managers interpret it? 11) It is most accurate to say that as a result of the global economic crisis, the potential for profitability in all sorts of industries is A) decreased B) increased C) uncertain D) predictable Answer: C Diff: Page Ref: 443 Skill: Application Objective: STUDY QUESTION 11.3: What is industry structure? How can managers interpret it? AACSB: Analytic Skills 12) Which of the following has the most potential to transform an industry's structure? A) a change in a competitor's management B) a change in a competitor's pricing structure C) the expansion of a distribution channel D) the exit of a competitor from the industry Answer: D Diff: Page Ref: 443 Skill: Concept Objective: STUDY QUESTION 11.3: What is industry structure? How can managers interpret it? 13) Which of the following is the purpose of a company's value proposition? A) to exceed customers' expectations B) to force competitors into a price war C) to identify consumers for whom the company creates products D) to explain why a consumer should buy the company's products Answer: D Diff: Page Ref: 444 Skill: Concept Objective: STUDY QUESTION 11.4: How does a firm create value in terms of cost leadership? 14) A strategy that focuses on lowering operating costs is referred to as a strategy A) differentiation B) cost leadership C) cost minimization D) every day low price Answer: B Diff: Page Ref: 444 Skill: Concept Objective: STUDY QUESTION 11.4: How does a firm create value in terms of cost leadership? 15) Achieving the status of overall low-cost producer in an industry means the company A) can strongly defend its market position in the event of a price war B) will earn the largest profits of any company in the industry C) makes the most appealing product in its industry D) can block the entry of new firms into the industry Answer: A Diff: Page Ref: 444 Skill: Application Objective: STUDY QUESTION 11.4: How does a firm create value in terms of cost leadership? AACSB: Analytic Skills 16) are the two basic strategies for creating value and attaining a competitive advantage in an industry A) Cost minimization and profit maximization B) Industry leadership and market dominance C) Customer satisfaction and product innovation D) Cost leadership and differentiation Answer: D Diff: Page Ref: 444 Skill: Concept Objective: STUDY QUESTION 11.4: How does a firm create value in terms of cost leadership? 17) A company that employs a strategy creates value by generating customer insights and translating those insights into innovations A) differentiation B) customer optimization C) cost leadership D) diversification Answer: A Diff: Page Ref: 444-445 Skill: Concept Objective: STUDY QUESTION 11.5: How does a firm create value in terms of differentiation? 18) The essence of a differentiation strategy is to A) target the most sophisticated segment of the market B) incorporate the greatest number of features into a product C) offer a unique product that supports a premium price D) outspend rivals on product advertising Answer: C Diff: Page Ref: 445 Skill: Concept Objective: STUDY QUESTION 11.5: How does a firm create value in terms of differentiation? 19) A differentiation strategy works well when A) a company designs a universal product for a broad market B) buyers believe differences in competing products not create meaningful value C) buyers are highly sensitive to price D) a company can continually develop products that have unique features Answer: D Diff: Page Ref: 444 Skill: Concept Objective: STUDY QUESTION 11.5: How does a firm create value in terms of differentiation? 20) Successful implementation of a(n) strategy requires a company to develop unique competencies that rivals find hard, if not impossible, to match or copy A) differentiation B) cost leadership C) international D) marketing Answer: A Diff: Page Ref: 455 Skill: Concept Objective: STUDY QUESTION 11.5: How does a firm create value in terms of differentiation? 21) A useful way to understanding the purpose of strategy is to think of the firm as a , composed of a series of distinct activities, including production, marketing, materials management, R & D, human resources, information systems, and the firm infrastructure A) activity network B) value constellation C) task succession D) value chain Answer: D Diff: Page Ref: 446 Skill: Concept Objective: STUDY QUESTION 11.6: What is the value chain? 22) A company's value chain is the A) variable sequence it goes through to convert its vision into shareholder value B) mixture of activities it takes to define product value standards C) discrete series of steps it takes to move a product from conception to the end-users D) blueprint it follows to leverage its core capabilities Answer: C Diff: Page Ref: 446 Skill: Concept Objective: STUDY QUESTION 11.6: What is the value chain? 23) In the context of value chain analysis, the support activities of a firm include A) outbound logistics, human resources, and information systems B) production, marketing, and operations C) systems and solutions development, firm infrastructure, and human resources D) research and development, marketing and sales, and service Answer: C Diff: Page Ref: 447 Skill: Concept Objective: STUDY QUESTION 11.6: What is the value chain? 24) Which of the following is considered a primary activity in a company's value chain? A) human resources B) product design C) systems and solutions D) materials and equipment Answer: B Diff: Page Ref: 446 Skill: Concept Objective: STUDY QUESTION 11.6: What is the value chain? 25) Dispersing value activities where and in how many places in the world is the issue of A) logistics B) clustering C) coordination D) configuration Answer: D Diff: Page Ref: 446 Skill: Concept Objective: STUDY QUESTION 11.7: What conditions influence how MNEs configure their value chains? 26) Differences in wage rates, worker productivity, and inflation rates are examples of that influence the configuration decisions of an MNE A) cluster effects B) macro cost factors C) logistics D) economies of scale Answer: B Diff: Page Ref: 449 Skill: Concept Objective: STUDY QUESTION 11.7: What conditions influence how MNEs configure their value chains? 27) Suppose Citibank decided to open a call center in Mumbai, India, because a detailed analysis of the country-specific advantages suggested that India is the optimal place in the world to respond to customers' calls In this example, Citibank is exploiting by running a call center in India A) value configuration synergies B) location economies C) geographic arbitrage D) value offshoring Answer: B Diff: Page Ref: 447 Skill: Application Objective: STUDY QUESTION 11.7: What conditions influence how MNEs configure their value chains? AACSB: Reflective Thinking 28) Long production runs lower per unit costs as a plant's marginal cost of production decreases as the plant's operation increases The plant is benefiting from A) economies of scale B) the cluster effect C) digitization D) location economies Answer: A Diff: Page Ref: 453 Skill: Concept Objective: STUDY QUESTION 11.7: What conditions influence how MNEs configure their value chains? 29) A is a special outlook, skill, capability, or technology that runs through the firm's operations, weaving together all value activities into an integrated value chain A) core competency B) value proposition C) mission statement D) learning curve Answer: A Diff: Page Ref: 455 Skill: Concept Objective: STUDY QUESTION 11.8: What conditions influence how MNEs coordinate their value chains? 30) Which of the following refers to the means by which management applies the systems that link a company's value activities, whether those activities are performed in one or in many countries? A) configuration B) logistics C) coordination D) core competency Answer: C Diff: Page Ref: 455 Skill: Concept Objective: STUDY QUESTION 11.8: What conditions influence how MNEs coordinate their value chains? 31) The notion that "practice makes perfect" underlies A) the cluster effect B) subsidiary network dynamics C) logistics D) the learning curve Answer: D Diff: Page Ref: 456 Skill: Concept Objective: STUDY QUESTION 11.8: What conditions influence how MNEs coordinate their value chains? 32) Social network analysis indicates that information flows more efficiently in a(n) manner A) collaborative B) competitive C) hierarchical D) impersonal Answer: A Diff: Page Ref: 467 Skill: Concept Objective: STUDY QUESTION 11.8: What conditions influence how MNEs coordinate their value chains? AACSB: Communication 33) Firms that compete in the global marketplace typically face the asymmetric forces of pressures for and A) global integration; local responsiveness B) price reductions; cost reductions C) politically sensitivity; market leadership D) cost reductions; marginal costs Answer: A Diff: Page Ref: 461 Skill: Concept Objective: STUDY QUESTION 11.9: Define global integration How international firms respond to this sort of pressure? 34) No matter the country or culture, money has three fundamental features that motivate consumers around the world to maximize purchasing power by buying the highest possible quality product for the lowest possible price These three features include all of the following EXCEPT which one? A) scarcity B) difficulty of acquisition C) difficulty of allocation D) difficulty of saving Answer: C Diff: Page Ref: 462 Skill: Concept Objective: STUDY QUESTION 11.9: Define global integration How international firms respond to this sort of pressure? 35) In the demand-pull and supply-push view of the market, which of the following is best classified as a push dynamic that drives supply in the global market? A) the intrinsic functions of money B) access to common media C) standardization D) converging consumer preferences Answer: C Diff: Page Ref: 462 Skill: Concept Objective: STUDY QUESTION 11.9: Define global integration How international firms respond to this sort of pressure? 36) Which of the following is a pressure for global integration of an MNE's value activities? A) the marginal costs of producing in separate facilities exceeding the marginal costs of producing in a single facility B) the variability in consumers' tastes and preferences across countries C) the market pressures to continually add new product features and functionality D) the demands imposed by host country governments Answer: A Diff: Page Ref: 462 Skill: Application Objective: STUDY QUESTION 11.9: Define global integration How international firms respond to this sort of pressure? AACSB: Analytic Skills 37) Which of the following is NOT a factor that encourages buying behavior emphasizing purchasing power over distinctive preferences? A) the intrinsic functions of money B) global access to common media C) endemic nationalism D) improved communications technologies Answer: C Diff: Page Ref: 463 Skill: Concept Objective: STUDY QUESTION 11.10: Define local responsiveness How international firms respond to this sort of pressure? 38) Which of the following is NOT a factor driving pressures for local responsiveness among global firms? A) cross-national differences in distribution channels B) diverging consumer tastes and preferences C) cross-national differences in product standards D) host government support of freer international trade Answer: D Diff: Page Ref: 465 Skill: Concept Objective: STUDY QUESTION 11.10: Define local responsiveness How international firms respond to this sort of pressure? AACSB: Multicultural and Diversity 39) Advantages of following a strategy of local responsiveness include the A) improved ability to transfer skills among different countries B) opportunity to adopt a global advertising program C) ease in standardizing manufacturing methods across countries D) flexibility to apply location-specific skills to local opportunities Answer: D Diff: Page Ref: 463-464 Skill: Application Objective: STUDY QUESTION 11.10: Define local responsiveness How international firms respond to this sort of pressure? AACSB: Analytic Skills 40) Growing demands for transparency will push companies to make their value chains A) more locally responsive B) more globally integrated C) simpler and shorter D) more complex and longer Answer: A Diff: Page Ref: 465 Skill: Concept Objective: STUDY QUESTION 11.10: Define local responsiveness How international firms respond to this sort of pressure? 41) According to the integration-responsiveness (IR) grid, consumer electronics and corporate banking are two types of industries with industry pressure for global integration and industry pressure for local responsiveness A) low; low B) high; high C) low; high D) high; low Answer: B Diff: Page Ref: 465 Skill: Concept Objective: STUDY QUESTION 11.11: What are the principal types of strategies that a company can choose? 42) In the international environment, firms use an international strategy, a multidomestic strategy, a global strategy, or a strategy A) regional B) standardization C) transnational D) locational Answer: C Diff: Page Ref: 466 Skill: Concept Objective: STUDY QUESTION 11.11: What are the principal types of strategies that a company can choose? 43) The integration-responsiveness (IR) expresses how a company's is a function of the relationship between its value chain and the prevailing pressures for global integration or local responsiveness in its industry A) value proposition B) target market C) mission D) strategy Answer: D Diff: Page Ref: 465 Skill: Application Objective: STUDY QUESTION 11.11: What are the principal types of strategies that a company can choose? AACSB: Analytic Skills 44) When the pressure for global integration is high and the pressure for local responsiveness is low, a company is most likely to pursue a(n) strategy A) global B) transnational C) multidomestic D) international Answer: D Diff: Page Ref: 467 Skill: Concept Objective: STUDY QUESTION 11.11: What are the principal types of strategies that a company can choose? 45) Firms that pursue a(n) strategy try to create value by transferring valuable core competencies from headquarters to foreign markets where rivals are unable to compete A) transnational B) multidomestic C) global D) international Answer: D Diff: Page Ref: 467 Skill: Concept Objective: STUDY QUESTION 11.12: What is an international strategy? What are its defining characteristics? Why would managers choose this type? 46) Which of the following is NOT a disadvantage of the international strategy? A) Headquarters can misread foreign-market opportunities and threats B) The transfer of core competencies to foreign markets is complicated by local decisions to adapt to local needs C) Local subsidiaries are not given the opportunity to adapt value activities and share what they have learned with headquarters D) The company can be blindsided by an unexpectedly innovative rival in the foreign market Answer: B Diff: Page Ref: 467 Skill: Concept Objective: STUDY QUESTION 11.12: What is an international strategy? What are its defining characteristics? Why would managers choose this type? 47) A distinct advantage of an international strategy is A) transferring core competencies to foreign markets B) reaping benefits of global learning C) customizing product offerings to local conditions D) leveraging local managers' knowledge of their markets Answer: A Diff: Page Ref: 467 Skill: Concept Objective: STUDY QUESTION 11.12: What is an international strategy? What are its defining characteristics? Why would managers choose this type? 48) A distinct disadvantage of an international strategy is A) restricting the movement of core competencies to local markets B) capitalizing on the benefits of global learning C) customizing product offerings to local conditions D) relying on home managers' knowledge of foreign markets Answer: D Diff: Page Ref: 467 Skill: Concept Objective: STUDY QUESTION 11.12: What is an international strategy? What are its defining characteristics? Why would managers choose this type? AACSB: Multicultural and Diversity 49) A multidomestic strategy makes the most sense for an MNE when the company faces which of the following conditions? A) a high need for local responsiveness and a low need to reduce costs via global integration B) a high need for local responsiveness and a high need to create efficiencies via global integration C) a low need for local responsiveness and a low need to reduce costs via global integration D) a low need for local responsiveness and a high need to create efficiencies via global integration Answer: A Diff: Page Ref: 468 Skill: Concept Objective: STUDY QUESTION 11.13: What is a multidomestic strategy? What are its defining characteristics? Why would managers choose this type? 50) An MNE that gives its local operations the authority to adapt value activities to prevailing local economic, political, legal, and cultural conditions is using a(n) strategy A) global B) multidomestic C) international D) continental Answer: B Diff: Page Ref: 468 Skill: Concept Objective: STUDY QUESTION 11.13: What is a multidomestic strategy? What are its defining characteristics? Why would managers choose this type? AACSB: Multicultural and Diversity 51) Johnson & Johnson delegates to its subsidiaries a great deal of authority to respond to local conditions Many subsidiaries have their own manufacturing, marketing, research, and human resource functions This value chain configuration illustrates the strategy A) transnational B) global C) multidomestic D) international Answer: C Diff: Page Ref: 468 Skill: Application Objective: STUDY QUESTION 11.13: What is a multidomestic strategy? What are its defining characteristics? Why would managers choose this type? AACSB: Reflective Thinking 52) A disadvantage of the strategy is that firms that adopt this strategy tend to decentralize too much autonomy to national subsidiaries A) multidomestic B) continental C) international D) transnational Answer: A Diff: Page Ref: 469 Skill: Application Objective: STUDY QUESTION 11.13: What is a multidomestic strategy? What are its defining characteristics? Why would managers choose this type? AACSB: Analytic Skills 53) Google essentially views the entire world as one market and assumes that there are no actionable differences among countries with regard to consumer tastes and preferences Google is engaging a(n) strategy A) international B) multidomestic C) transnational D) global Answer: D Diff: Page Ref: 469 Skill: Application Objective: STUDY QUESTION 11.14: What is a global strategy? What are its defining characteristics? Why would managers choose this type? AACSB: Reflective Thinking 54) A global strategy tends to be more successful when A) buyers are looking for customized products at bargain prices B) the industry's product is a commodity C) entry barriers are low D) suppliers have little bargaining power Answer: B Diff: Page Ref: 469 Skill: Concept Objective: STUDY QUESTION 11.14: What is a global strategy? What are its defining characteristics? Why would managers choose this type? 55) The MNE that applies a global strategy aims to A) compete essentially the same way wherever the company does business B) empower local operations to make decisions about value activities C) adapt activities to the industry standards in critical markets D) customize its business practices to consumer expectations Answer: A Diff: Page Ref: 469 Skill: Concept Objective: STUDY QUESTION 11.14: What is a global strategy? What are its defining characteristics? Why would managers choose this type? 56) The idea that champions worldwide consistency and standardization in order for the firm to become the low-cost leader is the A) international strategy B) multidomestic strategy C) global strategy D) transnational strategy Answer: C Diff: Page Ref: 469 Skill: Concept Objective: STUDY QUESTION 11.14: What is a global strategy? What are its defining characteristics? Why would managers choose this type? 57) An MNE in which new knowledge and capabilities are developed in both domestic and foreign locations, both independently and jointly, and then diffused throughout the worldwide organization, is following a so-called strategy A) transnational B) multidomestic C) global D) matrix Answer: A Diff: Page Ref: 470 Skill: Concept Objective: STUDY QUESTION 11.15: What is a transnational strategy? What are its defining characteristics? Why would managers choose this type? AACSB: Communication 58) The distinct disadvantage of the transnational strategy is its A) lack of local market responsiveness B) challenge in terms of day-to-day implementation C) failure to transfer knowledge from unit to unit D) inability to leverage core competencies Answer: B Diff: Page Ref: 472 Skill: Application Objective: STUDY QUESTION 11.15: What is a transnational strategy? What are its defining characteristics? Why would managers choose this type? AACSB: Analytic Skills 59) Although sounding contradictory, some firms see great benefit to orienting operations that simultaneously focus efforts on ensuring local responsiveness, aggressively reducing operational costs, and systematically transferring ideas and innovations among subsidiaries Companies following this approach are considered to be following a(n) strategy A) global B) multidomestic C) transnational D) international Answer: C Diff: Page Ref: 471 Skill: Concept Objective: STUDY QUESTION 11.15: What is a transnational strategy? What are its defining characteristics? Why would managers choose this type? AACSB: Communication 60) Recently, the term has been used to describe a global company that thrives on seeking unique ideas and insights from locations around the world and then leveraging that knowledge in international markets A) multidomestic B) domestic C) metanational D) cross-cultural Answer: C Diff: Page Ref: 473 Skill: Concept Objective: STUDY QUESTION 11.15: What is a transnational strategy? What are its defining characteristics? Why would managers choose this type? [...]... 11.12: What is an international strategy? What are its defining characteristics? Why would managers choose this type? 48) A distinct disadvantage of an international strategy is A) restricting the movement of core competencies to local markets B) capitalizing on the benefits of global learning C) customizing product offerings to local conditions D) relying on home managers' knowledge of foreign markets... QUESTION 11.12: What is an international strategy? What are its defining characteristics? Why would managers choose this type? 47) A distinct advantage of an international strategy is A) transferring core competencies to foreign markets B) reaping benefits of global learning C) customizing product offerings to local conditions D) leveraging local managers' knowledge of their markets Answer: A... Ref: 467 Skill: Concept Objective: STUDY QUESTION 11.12: What is an international strategy? What are its defining characteristics? Why would managers choose this type? 46) Which of the following is NOT a disadvantage of the international strategy? A) Headquarters can misread foreign-market opportunities and threats B) The transfer of core competencies to foreign markets is complicated by local decisions... What are the principal types of strategies that a company can choose? 42) In the international environment, firms use an international strategy, a multidomestic strategy, a global strategy, or a strategy A) regional B) standardization C) transnational D) locational Answer: C Diff: 1 Page Ref: 466 Skill: Concept Objective: STUDY QUESTION 11.11: What are the principal types of strategies that a company... Page Ref: 465 Skill: Concept Objective: STUDY QUESTION 11.10: Define local responsiveness How do international firms respond to this sort of pressure? 41) According to the integration-responsiveness (IR) grid, consumer electronics and corporate banking are two types of industries with industry pressure for global integration and industry pressure for local responsiveness A) low; low B) high;... How do international firms respond to this sort of pressure? AACSB: Analytic Skills 40) Growing demands for transparency will push companies to make their value chains A) more locally responsive B) more globally integrated C) simpler and shorter D) more complex and longer Answer: A Diff: 2 Page Ref: 465 Skill: Concept Objective: STUDY QUESTION 11.10: Define local responsiveness How do international. .. multidomestic D) international Answer: D Diff: 2 Page Ref: 467 Skill: Concept Objective: STUDY QUESTION 11.11: What are the principal types of strategies that a company can choose? 45) Firms that pursue a(n) strategy try to create value by transferring valuable core competencies from headquarters to foreign markets where rivals are unable to compete A) transnational B) multidomestic C) global D) international. .. transnational strategy? What are its defining characteristics? Why would managers choose this type? AACSB: Communication 58) The distinct disadvantage of the transnational strategy is its A) lack of local market responsiveness B) challenge in terms of day-to-day implementation C) failure to transfer knowledge from unit to unit D) inability to leverage core competencies Answer: B Diff: 2 Page Ref:... Answer: D Diff: 2 Page Ref: 467 Skill: Concept Objective: STUDY QUESTION 11.12: What is an international strategy? What are its defining characteristics? Why would managers choose this type? AACSB: Multicultural and Diversity 49) A multidomestic strategy makes the most sense for an MNE when the company faces which of the following conditions? A) a high need for local responsiveness and a low need to reduce... strategy A) global B) multidomestic C) international D) continental Answer: B Diff: 1 Page Ref: 468 Skill: Concept Objective: STUDY QUESTION 11.13: What is a multidomestic strategy? What are its defining characteristics? Why would managers choose this type? AACSB: Multicultural and Diversity 51) Johnson & Johnson delegates to its subsidiaries a great deal of authority to respond to local conditions